Magnus Hornø Gottlieb, Senior Public Affairs Advisor, Ørsted
Our energy system is rapidly undergoing a revolution. Over the past decade, renewable energy from new wind turbines and solar panels has become cheaper than fossil fuel-based energy. And, in some markets, it’s cost-competitive with existing fossil fuel generation.
This is hopeful news. With energy consumption causing almost three quarters of global greenhouse gas (GHG) emissions, decarbonising our energy system, starting with electricity, can make or break any effort to limit global warming to 1.5 °C.
Declining costs mean that wind turbines and solar PV will form the backbone of the future green energy system. This is reflected by leading analytical institutions’ expectations of the share of wind and solar needed to decarbonise global energy supply, in line with the Paris Agreement.
For instance, by 2050, IRENA projects that solar and wind need to make up 63 % of global power generation. IEA’s Sustainable Development Scenario points to 60 % solar and wind by that same year – with an even higher 67 % in its Paris Agreement-compatible net-zero scenario. And BloombergNEF expects that 39 % to as much as 84 % of global generation from sun and wind is needed by 2050. The bottom line: The amount of wind and solar power will be significantly higher than it is today, across all scenarios.
But relying on variable energy sources for two thirds of global generation raises an obvious question: How do we keep the lights on when the wind doesn’t blow and the sun doesn’t shine?
While there’s no single (read: simple) answer, three key insights help us understand how to maintain a stable supply of power when relying mainly on variable renewable energy sources:
The challenge is not just replacing coal and gas with solar and wind – it’s about building a new, smart, and integrated energy system. And while solar and wind will play a significant role, the future green energy system will be based on a multitude of sources. Solar and wind will be complemented by energy sources such as hydroelectric generation, biogas, and sustainable biomass, as well as geothermal heat or even wave or tidal energy, to form a diversified mix of renewable energy. All these energy sources can be combined with pumped and battery storage, while hydrogen and Power-to-X solutions, which will make up an increasingly large share of power consumption, can run when energy is abundant and turn off when it's scarce.
All the above will be tied closely together, physically by expanded and interconnected regional grids, and digitally by automated demand-response applications.
Electricity and heating make up about one third of global energy-related carbon emissions. And while it’s crucial to mitigate emissions from existing power production, the remaining two thirds – transport, manufacturing, and construction – are just as important.
These uses must be decarbonised by replacing fossil fuels with electricity –also known as electrification – either directly, for instance through the use of electric cars or heat pumps, or indirectly by using electricity to produce green fuels.
Taken together, the energy needed for direct and indirect electrification outweighs the electricity we use today. In other words, we’ll need a lot more renewable power. In Europe, for example, power demand is expected to increase by as much as 150 % from approx. 3,200 to 8,000 TWh/y by 2050, according to studies by the European Commission.
But won’t adding even more renewable generation from wind and solar PV just increase variability challenges? Actually, no, as most of these ‘new’ types of electricity demand are far less dependent on when power is used, thereby adding flexibility on the demand side, which can balance the variable supply of energy.
For instance, electric vehicles can be charged at night or when power is available, serving as a ‘virtual battery’ in the grid. Heat pumps, while to a lesser extent, have the same capacity. And hydrogen-based e-fuels can serve as a flexible offtaker – and in principle as energy storage.
Creating an energy system running entirely on renewable energy and relying on variable sources for the main part of its volumes requires significant investments. Not least in expanding transmission and distribution grids – even while some of these investments can be reduced by means of system integration, for instance by co-locating large-scale renewable generation with hydrogen production.
But taken together, the cost reduction potential from renewable generation will outweigh the additional investment costs of establishing a renewable energy future. Not least when factoring in the many positive externalities, such as reduced air pollution, job creation, and improved energy independence.
